The U.S. dollar was notably higher against the euro and the Swiss franc in the European session on Wednesday, climbing to multi-week highs, after the release of ADP data showing continued job growth in U.S. private companies for February.

Data from payroll processor ADP showed that U.S. private sector employment increased by 183,000 jobs in February after soaring by an upwardly revised 300,000 jobs in January.

Economists had expected employment to climb by 189,000 jobs compared to the addition of 213,000 jobs originally reported for the previous month.

Meanwhile, data from the Commerce Department showed that U.S. trade deficit widened more than anticipated in December as imports jumped and exports slumped.

The trade deficit widened to $59.8 billion in December from a revised $50.3 billion in November.

Economists had expected the deficit to widen to $57.9 billion from the $49.3 billion originally reported for the previous month.

Investors focused on growing tensions between the U.S. and North Korea.

After North Korea reportedly restored part of a missile launch site it had begun to dismantle, U.S. President Donald Trump's national security advisor John Bolton has warned that the U.S. will look at ramping up sanctions against the country.

The currency rose against its most major counterparts in the Asian session, as strong data on U.S. service activity and new home sales released overnight soothed fears over the health of the world's largest economy.

The greenback spiked up to 1.0056 against the franc, its strongest since February 19. The greenback is seen finding resistance around the 1.03 level.

The greenback advanced to a new 2-week high of 1.1286 against the euro, following a decline to 1.1315 at 8:15 am ET. The greenback is poised to challenge resistance around the 1.10 mark.

Survey data from IHS Markit showed that Eurozone's construction activity improved in February, led by upturns in commercial and infrastructure activity and stronger expansion in housing activity.

The Construction Purchasing Managers' Index, or PMI, rose to 52.6 in February from 50.6 in January.

The greenback strengthened to 1.3391 against the loonie, a level unseen since January 4. On the upside, 1.35 is possibly seen as the next resistance level for the greenback.

The U.S. currency held steady at 1.3141 against the pound, after having rebounded from a low of 1.3179 touched at 5:15 pm ET. At yesterday's close, the pair was worth 1.3178.

The greenback firmed to a 2-month high of 0.7024 against the aussie early in the European session and held steady thereafter. The pair was valued at 0.7084 when it ended deals on Tuesday.

On the flip side, the greenback pared gains to 111.77 against the Japanese yen, from a high of 111.92 set at 4:15 am ET. Next key support for the greenback is likely seen around the 110.00 level.

Having advanced to a 3-week high of 0.6753 against the kiwi at 10:45 pm ET, the greenback reversed direction with the pair trading at 0.6780. The kiwi-greenback pair had finished Tuesday's trading at 0.6794.

Looking ahead, Canada Ivey PMI for February and U.S. Federal Reserve's Biege book report are scheduled for release in the New York session.

The EUR / USD pair, which recently held above the 1.13 mark, broke through an important support level and slipped to two-week lows.

It is noteworthy that this happened even despite the improvement in business activity in the eurozone and the increase in consumer spending in the region.

According to analysts, the main problem for the euro is that the European Central Bank (ECB) is still thinking about introducing additional incentives and increasing the supply of cheap money.

It is assumed that the regulator may postpone the increase in interest rates from a record low at least until the end of this year and in the near future will again begin to offer long-term loans to banks.

The next ECB meeting should be held tomorrow.

"The euro is now clearly selling on rumors of lower forecasts for eurozone GDP growth and inflation, as well as a possible launch of LTRO. However, if the regulator starts worrying more about rates than about the state of the European economy, then EUR / USD will begin to buy on facts already during the next press conference of the ECB Head Mario Draghi," experts say.

With imports jumping and exports slumping, the Commerce Department released a report on Wednesday showing the U.S. trade deficit widened by more than anticipated in the month of December.

The Commerce Department said the trade deficit widened to $59.8 billion in December from a revised $50.3 billion in November.

Economists had expected the deficit to widen to $57.9 billion from the $49.3 billion originally reported for the previous month.

The substantial monthly increase drove the U.S. trade deficit to its highest level since reaching $60.2 billion in October of 2008.

The trade deficit for 2018 was also the biggest since 2008, widening to $621.0 billion from $552.3 billion in 2017 as President Donald Trump ramped up his trade war with China.

The significantly wider trade deficit in December came as the value of imports surged up by 2.1 percent to $264.9 billion, while the value of exports tumbled by 1.9 percent to $205.1 billion.

While imports of capital and consumer goods showed notable increases, exports of petroleum products and civilian aircraft fell sharply during the month.

Andrew Hunter, Senior U.S. Economist at Capital Economics said the data "confirms that net trade was a drag on GDP growth in fourth quarter," adding, "We expect that drag to intensify in the first quarter."

Private sector job growth in the U.S. slowed in the month of February after spiking in January, according to a report released by payroll processor ADP on Wednesday.

ADP said private sector employment increased by 183,000 jobs in February after soaring by an upwardly revised 300,000 jobs in January.

Economists had expected employment to climb by 189,000 jobs compared to the addition of 213,000 jobs originally reported for the previous month.

Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, noted small business job growth saw a significant slowdown as firms continue to struggle with offering competitive wages and benefits.

Employment at small businesses inched up by just 12,000 jobs, while large and mid-sized businesses added 77,000 jobs and 95,000 jobs, respectively.

"The economy has throttled back and so too has job growth," said Mark Zandi, chief economist of Moody's Analytics. "The job slowdown is clearest in the retail and travel industries, and at smaller companies."

Zandi added, "Job gains are still strong, but they have likely seen their high watermark for this expansion."

The report said employment in the service-providing sector increased by 139,000 jobs, while the goods-producing sector added 44,000 jobs.

On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.

Employment is expected to rise by 180,000 jobs in February after jumping by 304,000 jobs in January. The unemployment rate is expected to tick up to 3.3 percent from 3.2 percent.

Euro buyers only temporarily stopped a downtrend yesterday and good US data led to a further fall in EUR/USD pair. At the moment, the main task of the bulls is to return to the resistance level of 1.1310, fixing on which can lead to an upward correction in the area of 1.1337, where I recommend fixing the profit. Given that no fundamental statistics for the Eurozone are expected today, it is likely that pressure on the euro will continue. In this scenario, it is best to expect to open long positions on the rebound from the support of 1.1279 and 1.1257.

To open short positions on EUR / USD pair, you need:

Despite the fact that the downward trend in the euro gradually slows down while trading is below 1.1310, the pressure on the pair will continue. Moreover, an unsuccessful consolidation at this level in the first half of the day will be a direct signal for the further sale of the euro in order to update the support of 1.1279 and 1.1257, where I recommend taking profits. In case of growth above 1.1310, you can count on short positions immediately on the rebound from the resistance of 1.1337.

More details about the forecast can be found in the video review.

Indicator signals:

Moving averages

Trading below the 30- and 50-day moving averages, which indicates the advantage of euro sellers.

Bollinger bands

In case of further decline, support will be provided by the lower limit of the Bollinger Bands indicator in the region of 1.1279. In the case of an upward correction, you can sell the euro on the rebound from the upper boundary of the indicator in the area of 1.1330.

Yesterday's negotiations between representatives of the United Kingdom and the European Union did not again lead to a trade agreement. On the eve of the British Prime Minister Theresa May sent the Attorney General of England and Wales, Jeffrey Cox, to Brussels in order to make changes to the Brexit deal, which are necessary for the passage of the agreement through the British Parliament. +

Theresa May intends to change the "insurance plan", which should guarantee a transparent border between Ireland and Northern Ireland. As you know, the question of the border causes discontent of many British parliamentarians.

However, negotiations with the participation of Cox, which lasted more than three hours, did not bring the desired result. Negotiations involving lower-ranking officials will continue today. Recall on March 29, the UK must leave the EU, regardless of whether an agreement is reached on a trade deal or not. In the absence of an agreement, the UK economy may suffer great damage.

Following the release of U.S. trade data for December at 8:30 am ET Wednesday, the greenback traded mixed against its major counterparts. While the greenback changed little against the yen, it rose slightly against the rest of major counterparts.

The greenback was trading at 111.79 against the yen, 1.0050 against the franc, 1.1299 against the euro and 1.3144 against the pound around 8:35 am ET.